Is there ever a situation where a GK would be a NON-desirable thing?
Yeah if the Vet is a HUGE d***! If they are handing you nothing but bad accounts, when you get a GK your goals are different. It supposed to be a leg up because you have assets but they expect you to be more successful, sooner. Not all GK's are equal but the home office doesn't see it that way. Wasn't it just last year or the year before they were offering vet's a 15m bonus if they did a GK? I doubt that worked out well for most newbs. Vet brings on a newb, newb gets bottom of barrel clients, vet gets 15m for doing it, newb fails and vet gets all accounts back. A win/win situation!
If the broker is being forced to do it. If he/she is not 100% on board with this, they could really screw you. Give you clients they know will go back to them. Clients with assets they will never move. Clients who just died or live in other states. I have seen this occur in my time with EDJ.
As far as I know, Jones can't force anyone to do a GKN. They've made it very compelling financially for vets to do one.
Some guys have a great experience with there GKN FA. Others, not so much. You have to understand that they're giving away clients who they either don't want to service any longer, they don't get along with, that don't listen to them, or any other reason they can think of. Most of us have these list of clients in our branches. Mine has about $2 million of AUM in it right now. When it gets to $5 million, I'll do a GKN. All of those folks are people I'd rather not call on. Or who don't return my calls.
Once you realize this, you'll have a better understanding of what the GKN program is. It's a head start. It's not the golden ticket. You get to work in an office from the get go, while a few of your peers may be working out of their basement or off the kitchen table. You have a vet you can learn something from. Both good and bad. For some it works out to be a great thing. Others wish they would have just started from scratch.
Give an example or two of forced goodknights:
(1) The most common. A broker takes over a larger office and part of the condition of him/her taking over the office is a goodknight within 12 months.
(2) Many Regional leaders are "informed/strongly encouraged" that they need to do a goodknight.
Most goodknight situations are a broker wants to get rid of their time consuming clients or truly want to help a new broker get started. The above situations are the minority, but do occur.
The only GK's that I have seen where the Vet truly cared whether the new broker succeeded have been family situations.
henry - Now that you mention it, I have seen these a couple of times. It doesn't happen that often, but you're right, it does happen.
great input- thanks!
any time you don't know your GK personally.
VERY IMPORTANT CONSIDERATION SHOULD BE GIVEN TO THIS DECISION.
1) GK standards are considerably higher. Its funny because when people take over offices they have half the standards of a GK1. Two buddies of mine here in the region took on good sized offices early on in my GK1 program. They both got more assets than me, but HALF THE STANDARDS. And the sick part is I WAS SPLITTING COMMISSIONS 50/50 WITH THE VET while they were getting 100% of theirs. That doesn't make much sense to me. I guess thats an issue with Existing Branch standards not GK standards though.
2)In a GK1 your salary drops off at 8 months, not 12. Be advised, because they won't mention this....ever. When that month 8 paycheck came in 1200 bucks short, I was furious. They told me it was on the compensation agreement I signed when I took the job. I pulled it out of my records and it was a new/new comp agreement, which stated 12 months salary. When I called about it, they said that when I took the GK1 I signed a new comp agreement that stated 8 mos. salary. My bad for not reading the fine print I guess.
I did a GK1. The vet I worked with had flogged the accounts previously and there were dozens of very small, almost worthless accounts. This put my production standard at double what many others had, including those inheriting offices with double the assets I received. It was shocking to me at PDP to compare my production with others. In many cases I had three times the production, but would sometimes still miss a bonus.
As mentioned, add the fact that the base goes away after 12 months, and it's a tough row to hoe. I do think it's preferable to being new-new, but the best situation by far is to take over an open office. BTW, I'm no longer with EJ. Begging for business on a doorstep just wasn't for me.
I have a couple friends that took over GK offices (I took a very very small office). I wouldn't trade my situation for theirs. Most of the AUM received were either fully worked (no money to be made from them), or clients that would not move. One of them had about half of those assets move within the first couple months (one large account died, the other moved out of state). Standards where the same, while the AUM were halved.
My take is unless the FA giving the assets away truly wants to help you, you are likely to get most of the short end with few benefits.
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